High Risk, High Return Investments

Emerging market investments

Emerging market investments can be just as rewarding as hedge funds and real estate. Specifically, emerging market investments have to do with putting money in corporations or development projects located within a foreign sate, such as Mexico and other less developed countries, seeking foreign investment. And in order to lure in cash from wealthier countries, these emerging markets promise volatile growth rates at better returns than are available in developed countries (in recent years, emerging markets experienced growth in the range of 52%, compared to 26% in Western countries).

To get a better grip on how this form of investment works, let me give you an example: Let’s say my research leaves me certain that over the next few months, coffee crops will be in short supply and prices will increase. This finding leads to me to speculate coffee in an emerging market, such as Colombia, and I decided to buy a coffee futures contract for $1 American. Now, if my predictions end up being correct and six months down the road the market value of my coffee contract climbed to $3, I can sell my investment for a profit of $2.

the high road

Only with hands-on experience will the real “cowboy investor” learn when to hold ‘em and, likewise, fold ‘em. Don't believe me? Read any investment book written by one of the top gurus out there, they will collectively attest to the same thing. Unless saving your money includes stashing it away under the mattress, odds are that you will probably lose much more than win when it comes to high-risk investments, but the payoff of such a high-wire act, when it hits, can be huge. Resources:www.Forbes.comwww.Bloomberg.comwww.AssociatedContent.com